Will I receive a W-2 or 1099 for disability payments received through my job?

by Eric S. MacCollum, CPA | Feb 05, 2019

I was injured at home and was out of work for six weeks. During that time, I filed for, and received, disability through my job. So, it’s not Social Security disability—I actually don’t know what you would call this type of disability. I remember I elected to have taxes taken out of my disability checks. Will I receive a W-2 or a 1099 from my disability payers? I know since I had taxes taken out that I will have to file them, but I am just wondering what kind of form it will be on. I’ve already received my W-2 from work.

Based on the information you provided, it sounds like you are receiving short-term disability benefits from an employer-sponsored plan. If you had taxes withheld from the benefits, you will receive a Form W-2 from the insurance company. This is the normal process when the premiums of the plan are paid with before, or pre, tax dollars, when they were taken as a deductible expense by your employer. Another method, simply for additional information, is to not take the premiums as a deductible expense and pay the premiums with after tax dollars, meaning the premiums are not a deductible expense. This would make the benefits nontaxable. In your case, you will receive a Form W-2 and will include the benefits along with any other wages received on your tax return. If you require assistance, the PICPA has a CPA locator on its website to help you find a professional in your area.

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Answered by: Eric S. MacCollum, CPA, is a principal with Hudak and Company in Lemoyne, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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